Caffeine (1,3,7-trimethylxanthine) had been found to inhibit the polymerization reaction catalyzed by RNA-dependent DNA polymerase of murine and avian oncogenic viruses. Purified avian myeloblastosis virus DNA polymerase was also inhibited when analyzed with templates such as 70S and 35S viral RNA, poly (rA)-(dT)12-18, activated calf thymus DNA and globin mRNA. Such an effect by caffeine was further exploited to analyze the replication cycle of tumor viruses and the events underlying transformation.